Correlation Between GS Retail and Hana Financial
Can any of the company-specific risk be diversified away by investing in both GS Retail and Hana Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GS Retail and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Hana Financial, you can compare the effects of market volatilities on GS Retail and Hana Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GS Retail with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Hana Financial.
Diversification Opportunities for GS Retail and Hana Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 007070 and Hana is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and GS Retail is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GS Retail Co are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of GS Retail i.e., GS Retail and Hana Financial go up and down completely randomly.
Pair Corralation between GS Retail and Hana Financial
Assuming the 90 days trading horizon GS Retail Co is expected to under-perform the Hana Financial. But the stock apears to be less risky and, when comparing its historical volatility, GS Retail Co is 1.12 times less risky than Hana Financial. The stock trades about -0.04 of its potential returns per unit of risk. The Hana Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,726,489 in Hana Financial on October 16, 2024 and sell it today you would earn a total of 1,133,511 from holding Hana Financial or generate 23.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.47% |
| Values | Daily Returns |
GS Retail Co vs. Hana Financial
Performance |
| Timeline |
| GS Retail |
| Hana Financial |
GS Retail and Hana Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Hana Financial
The main advantage of trading using opposite GS Retail and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Hana Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hana Financial will offset losses from the drop in Hana Financial's long position.| GS Retail vs. Dong A Steel Technology | GS Retail vs. Jeil Steel Mfg | GS Retail vs. Myoung Shin Industrial | GS Retail vs. Hwasung Industrial Co |
| Hana Financial vs. Korea Air Svc | Hana Financial vs. Lotte Chilsung Beverage | Hana Financial vs. GS Retail Co | Hana Financial vs. Kisan Telecom Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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